Sun Microsystems is growing in the software business with many new offerings that we examine in the companion piece, "Vendor Rating: Sun Microsystems." This will be of interest to anyone evaluating Sun's software and service offerings.

• Through acquisitions, Sun is rapidly growing into a multi-product vendor that uses an open-source technology base.
• Sun is a leading supplier of open-source software and contributor to many additional open-source projects.
• Sun has struggled in the past with software acquisitions and has to prove itself successful with its recent acquisitions.

• Consider Sun and its open-source software as a serious choice for infrastructure and development.
• Use care in depending on Sun's software as a well supported product line until Sun proves itself worthy via a large installed base and excellent track record for support.
• In the ID management, operating systems and development space, consider Sun a primary choice.
• Sun customers should exploit the open-source and standards-based nature of Sun's software to position themselves for the easiest transition to future versions of Sun's software, or to migrate away should the need arise and Sun does not maintain its strong market position.
• Customers evaluating Sun's software should also exploit the open-source possibilities of the underlying technologies, while buying Sun's software when most appropriate, for example, identity management or Java CAPS.

This research note looks in depth at the software offerings from Sun Microsystems. Sun has some very solid, well integrated software products as well as others that have not been integrated well. Sun is making an effort to turn this around and a careful watch is warranted. This effort will need to grow quickly as the competition is not standing idly by. Sun has much to prove in the software market and the next two to three years will be a major indicator if its approach to software gains traction.

Over the past years, Sun has moved from being a hardware vendor with an operating system to a major vendor of software and supporter of the open source initiative (see "Vendor Rating: Sun Microsystems"). With the recent acquisition of MySQL (the open-source database management system [DBMS]), Sun has also moved to become a more heterogeneous software and hardware vendor, now supporting not only Solaris Unix but also Linux and Windows. This is especially important to current Sun customers as it opens more options for future growth in their environments, and at the same time, gaining new customers and market share for Sun. The still open question for Sun is whether it can become truly successful as a software company, since in the past it has struggled with software (for example with the acquisition of Forte).

Sun, headquartered in Santa Clara, California, designs and offers technology infrastructure, including servers, storage, software, application infrastructure, services and microelectronics. Founded in 1982, it has 33,350 employees in 110 countries worldwide, and had 2007 fiscal year revenue of $13.9 billion. Software and services has become a major part of Sun's revenue, estimated at about $2.3 billion in 2007, representing 17% of its revenue.

Sun has five lines of business in software: Solaris (the bulk of the company's software revenue), Software Infrastructure, Java (Java Mobile Edition, Java Standard Edition and Java Enterprise Edition), database management and Developer. Each of these has distinct routes to market and strategies for monetization. It is important to recognize that Sun does not view the traditional enterprise software focus of many software vendors as representative of the future of software sales. It has a much greater emphasis on creating software development communities as opportunities around and on top of its strategic Solaris operating system, although it does not reject integration and interoperability with Linux. Although Java and Java ME are mostly monetized through OEMs, Solaris and Software Infrastructure are predominantly sold through Sun's direct sales force, and system integration and resellers' community. The software group is making significant investment to enable these channels and expects to see growth as a result.

Sun's focus on software has been met with skepticism and a lack of understanding. Sun continues to lack a clearly stated link between the focus on software and how it will drive revenue growth. Sun's investment in open-source is a two-edged sword. On the one hand is the increasing skepticism about Sun's ability to monetize open-source software (OSS) and on the other is positioning Sun as a possible leader if the open-source model has the expected disruptive effect on the software market through licensing and pricing. We have yet to see confirmation that Sun's software strategy is moving it to a leading mind-share competitive position compared to IBM or Oracle.

Open Source: (Analysis by Mark Driver) Sun is a premier contributor of key technologies to the open-source movement. From OpenSolaris, to middleware (GlassFish), DBMS (MySQL) and Java, Sun has delivered innovative code into various communities. Sun is engaged in a major initiative to prove that Solaris can evolve to a new breed of operating system: more powerful and richer than the Linux distributions, while capitalizing on the process and model improvements brought about by open source distribution methods and tools. To exploit Linux momentum, Sun is adopting two central approaches:

1. Enable IT organizations to build a software stack comprising open source and community-developed components for volume-based platforms in emerging new infrastructures and businesses.
2. Evolve Solaris from its proprietary roots into a package management distribution similar to Linux (and with Linux user tools and features) benefiting from community contributions to sustain innovation and agility to fit evolving and emerging new architectures.

Nevertheless, challenges remain about OpenSolaris's appeal to Linux users while maintaining the stable brand image of Solaris, driving a vibrant community with dynamic innovation yet maintaining compatibility and stability of the kernel application programming interface (API) and the user interface and creating a functional package management system that allows users and developers to add packages easily. With the acquisition of MySQL (running primarily on Linux and Windows), Sun has begun to re-position its platform/operating system story from being highly Solaris-centric to more heterogeneous inclusiveness (for example, LAMP — Linux, Apache, MySQL, Perl/PHP/Python) with support and subscription services that can be aimed at Linux and Windows as well as Solaris users.

Infrastructure Management Software: (Analysis by Donna Scott) Sun has expanded its vision and strategy for infrastructure management software. While Sun does not compete in the market for broad heterogeneous IT operations management software, it is investing in some multi-platform capabilities, especially in areas to complement its platforms. In particular, it sees server virtualization as its ticket to making its longtime "N1" vision for a dynamic data center real and actionable. Another significant change in Sun's strategy is in enabling its management software to be offered as a customer-hosted option as well as a service offering (Sun's prior strategy offered some software only as a service offering and there was significant customer push back on that). Sun has improved the manageability of its software and hardware and in 3Q08 will make it relevant to a virtualized world. Sun's next step is to go beyond foundational provisioning and patching capabilities toward enabling a real-time infrastructure.

Solaris: (Analysis by George Weiss) Solaris still sits at the heart of Sun's hardware strategy — all of Sun's server and client platforms can run Solaris and even hybrid designs like the "Thumper" intelligent storage sub-system are based on Solaris underpinnings. The key aspects of Sun's strategy are to demonstrate superiority for a Solaris "ecosystem," while endorsing the use of Red Hat Linux or Windows where client preference is too strong for a Solaris approach to work. Solaris continues its market share lead in the Unix market as a high quality offering with a large and vibrant independent software vendor (ISV) software portfolio. However, Sun is very conscious of the threat that Linux poses to Unix, and the Sun approach is to enable ever better Linux coexistence, so that Solaris effectively becomes a better Linux than Linux is itself. The goal is to provide tangible differentiation from competitive operating systems and sufficient attractiveness for developers to generate a stream of revenue from hardware sales and software support. However, Solaris will continue to face intense competition from Linux, especially Red Hat, as ISVs continue to flock to Linux.

Service-Oriented Architecture Infrastructure: (Analysis by Jess Thompson) Sun's lead products for service-oriented architecture (SOA) are its Java Composite Application Platform Suite (JCAPS), and its popular Identity Management Suite. Sun has, arguably, one of the most technically elegant suites for SOA. It uses a microkernel architecture that is OSGi-compliant. The base eGate messaging infrastructure has been merged with Sun's JBI reference implementation resulting in Sun's open-source Open enterprise service bus (ESB). Open ESB reflects Sun's current approach to application infrastructure which is to create and leverage open-source software (OSS) communities. Thus, the code for many (but not all) of its application infrastructure products will be freely downloadable. However, obtaining support and maintenance for OSS technology will require purchasing a license.

In the two years plus since the SeeBeyond acquisition, Sun has yet to regain the pre-acquisition momentum enjoyed by SeeBeyond. While the JCAPS suite represents a significant application infrastructure offering, Sun is not attracting new and maintaining existing customers as well as SeeBeyond. Mark Herring — Sun's new Vice President Infrastructure Marketing — has adopted a vertically-oriented approach to sales. This is promising but not yet proven.

ID Management Suite: (Analysis by Earl Perkins) Sun acquired user provisioning vendor Waveset Technologies in late 2003 to serve as a starting point for its identity and access management (IAM) strategy. Foundational directory and metadirectory products, a Web access management system based on open source elements, and the further acquisition of Vaau role life cycle management in late 2007 have created an IAM portfolio that provides enterprises with a relatively effective answer to their IAM requirements. Sun built a network of strong system integrators and technology partners early in the evolution of the IAM market. With this combination, Sun made inroads in financial services, telecommunications and other vertical industries seeking a system that is relatively easy to install, configure and maintain (at least compared to competitors). Its Sun Java System Identity Manager and Access Manager products are considered leaders in the IAM market (see "Magic Quadrant for User Provisioning, 2H07"). Of late, IAM competitors IBM Tivoli, Oracle and Novell have developed similar strategies and threaten Sun's leadership in customer satisfaction and system integration partnerships. Ease of installation and maintenance was attributed (to some extent) to Sun's lean architecture, with lean meaning that some features lacked robustness. Sun's new releases and approach attempt to address both architecture and competitive threat.

Database Management Systems: (Analysis by Donald Feinberg) Database management systems are not new to Sun as it has been supporting the PostgreSQL Open-Source DBMS (OS DBMS) for several years as well as assisting IBM, Oracle, Sybase and others in tuning DBMSs for use on Sun hardware platforms. However, 2008 is a milestone for Sun since acquiring the OS DBMS MySQL (see "Combining Sun and MySQL (Part 1): Greater or Less Than the Sum of Its Parts?" and "Combining Sun and MySQL (Part 2): New DBMS Market Dynamics"). In 2007, Sun also entered the data warehouse appliance market with an appliance offering with Greenplum, a massively parallel DBMS engine (based on PostgreSQL) running on the SUN X4500 ("Thumper") hardware platform. Over a short two-year period, Sun has made a move to become a potentially significant vendor in the DBMS market while at the same time demonstrating its resolve to support Linux and Windows in addition to Solaris (MySQL's customer base is predominately Linux and Windows). While there is little question of Sun's position with respect to open-source, the test will be whether Sun can successfully turn this acquisition and partnerships into significant revenue. This can have a profound and disruptive effect on the DBMS market with respect to pricing, adding pressure on Sun's relationship with the other DBMS vendors.

Java: (Analysis by Mark Driver) The Java Community Process remains one of the most successful de facto standard efforts in IT. Sun remains a positive force in Java SE (the basic Java VM and framework), Java ME (the compact mobile edition) and in Java EE (the high-end enterprise computing edition). All face challenges, but all continue to grow in mainstream adoption. However, the ability of Sun to monetize its specification and standard-setting leadership remains challenged, especially in the enterprise arena where it is a trailing competitor in the Java EE application server market. However, the impending complexity of Java Platform, Enterprise Edition (Java EE, formerly J2EE) is creating more user interest in the alternative open-source Spring Framework, which is increasingly perceived as an alternative to the Java EE set of standards. The recent introduction of a new Sun Java EE technology stack of GlassFish is aimed at altering that situation by relying on an open source momentum and community process and by offering GlassFish as the Java EE reference implementation. The recent acquisition of the leading open source DBMS (MySQL) might also be a beginning of a new chapter in Sun's struggle to conquer the mainstream application infrastructure markets.

Storage Management Software: (Analysis by Dave Russell) Sun has many disparate storage device management products, data management capabilities with strong technologies such as Lustre, Quick File System (QFS) and ZFS and an increasing number of data protection OEM and reseller arrangements. Sun has strong core storage management solutions for volume management and clustered file systems (QFS, SAM-FS and ZFS) as well as robust device management for its mainframe offerings; however, Sun has yet to fully deliver on its plan for a more unified management stack for storage in the open systems segment. Sun partners with several vendors, for example BakBone and Symantec, for data protection solutions, in addition to snapshot and replication capabilities from disk array OEMs and Sun's own intellectual property. Sun has been late to market with its most recent archiving platform, code named "Honeycomb," after discontinuing its previous Intellistore offering. Sun's Storage Resource Management (SRM) strategy remains elusive with its OEM of the HP's Storage Essentials product and Sun's SRM assets from STK's purchase of Storability. Recently, Sun has been promoting its Open Storage Platform, which includes the Solaris operating system and the ZFS file system, as well as the NFS communication protocol, as a means of creating feature-rich and cost competitive storage platforms. It will take time to measure the success of the open storage initiative, however if Sun is successful, this could translate into additional Sun hardware revenue.